Apple Tablet Coming In March, Aims To Blow Up Amazon

Apple will start production of a 10.1" LCD screened tablet in February, says Yair Reiner of Oppenheimer, in a note released this morning (via Apple Insider.)

The tablet should launch in late March or early April, says Reiner, citing his "checks into Apple's supply chain." He writes, "At this stage Apple appears to be sizing its supply chain to support production of as many as 1M units per month."

In addition to producing the tablet, Apple is working on deals with publishers, says Reiner.

AI: "Contacts in the U.S. tell us Apple is approaching book publishers with a very attractive proposal for distributing their content," Reiner said. "Apple will split revenue 30/70 (Apple/publisher); give the same deal to all comers; and not request exclusivity. We believe the typical Kindle split is 50/50, rising to 30/70 if Kindle is given ebook exclusivity."

Two other things Apple can offer -- ads in magazines, which Kindle doesn't allow, and separate digital storefronts, which Kindle doesn't allow. The publishing industry seems to be very angry at Amazon.

Reiner says the tablet could add $0.25-$0.38 of incremental EPS per quarter, assuming sales of 1-1.5 million tablets per quarter at an average price of $1,000.